KMB, which has 3,900 buses, says it has lost 500,000 passengers over the past 10 years, with more people using the expanding railway network. Photo: K.Y. Cheng

KMB has applied to the government for an 8.5 per cent fare increase next year, after it lost HK$12.5 million in the first six months of the year.

Managing director Edmond Ho Tat-man said 70 per cent of the company's 400 bus routes were running at a loss, which he largely attributed to high fuel prices and a significant increase in wages and other operating expenses.

The proposed fare rise works out to an average 53 HK cents per trip.

Ho said he hoped the extra income could allow the company to break even next year. The operator last raised its fares in August last year - by 3.6 per cent, lower than the 8.6 per cent it wanted. Ho said he was aware the rise would affect a lot of passengers but said the demand was reasonable.

Citybus and New World First Bus said they had no immediate plans to raise fares.

"Since the last fare increase application, international fuel prices have risen by about 40 per cent, while wages have seen a cumulative rise of 9 per cent," Ho said. The two expenses accounted for 70 per cent of the company's operating costs in the first half of the year.

KMB, the city's largest franchise bus operator, with a fleet of 3,900 buses, said passenger numbers had declined from 3.1 million in 2002 to 2.6 million. It said the expanding railway network was taking away bus travellers, with the greatest impact felt on routes in Tseung Kwan O, Sai Kung, Sha Tin and Ma On Shan.

Deputy managing director Evan Auyang said KMB's operating efficiency had suffered due to worsening traffic congestion. Auyang said 60 per cent of routes were seeing journey times grow 15 to 30 per cent longer. For example, a bus could regularly travel at 22.5km/h in Waterloo Road, Kowloon, in 2005, but by 2010 it was 17.5km/h.

Auyang said KMB had been consulting district councils about streamlining services on routes where demand was low but more multiple buses were serving it.

Last year the operator applied to rationalise 156 routes, but changes have been made to only two. Up to 200 routes could be restructured in future, Auyang said.

Richard Tsoi Yiu-cheong, of the Coalition to Monitor Public Transport and Utilities, said: "The [proposed] rise is unreasonable as it is far higher than increases in inflation and wages."

He said KMB had not lobbied district councils hard enough to streamline services on less-popular routes, which would allow the company to assign buses where demand was greater.

The Transport Department said it would consider a number of factors including the fluctuation of the company's operating costs and the public attitude when handling the application.

This article appeared in the South China Morning Post print edition as KMB WANTS TO RAISE FARES BY 8.5 pc